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There are many ways to buy or sell a stock for a profit.  You could currently be using fundamental analysis, broker recommendations, astrological timing, or many hundreds of other methods.  But no matter what your method for buying or selling a stock is, the truth is that none of it matters unless the stock you want to buy is going up.  

ASX Market Watch provides free research on Australian Stock Trends, a free course on how we determine those trends, and free articles on building wealth - all in the aim of providing a transparent and useful service to people like you.  

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Contact Dave here: dave@asxmarketwatch.com

January 24, 2010   Posted in: Research On Australian Stock Trends  2 Comments

Discover The Strongest Sectors Now: With Relative Strength

The chart below tells you what parts in different markets have the strongest relative strength at the moment. 

As used by market wizard William O’Neil, no other site in Australia has this information displayed so simply and powerfully – exclusively supplied by great Australian portfolio manager Oliver Ward.  And as Oliver updates it, so will we!   For Terms, click here.

Oliver Ward has extensive global experience in equity trading and portfolio management.  Prior to moving to Australia Oliver lived and worked in New York for 15 years where he received a Series 7, 63 and 24 from the National Association of Securities Dealers in Washington DC.  Oliver was a Vice President – Investments at Royal Bank of Canada where he advised Scandinavian Institutions such as Volvo, IKEA, and Royal Bank of Sweden on US equity trading.  Oliver’s Contact:

Email: Oliver.Ward@rbsmorgans.com

Mobile:  0403 159 406

Click the chart below to view on its own!

Happy Trending!

Any suggestions, questions, comments, swing me an email here: dave@asxmarketwatch.com

March 9, 2010  Tags: , , , , ,   Posted in: Research On Australian Stock Trends  No Comments

9 Golden Rules Of Share Trading

9 Golden Rules Of Share Trading

By Strudy of ASX Newbie.com

(Dave’s note: It is always good to get another investor’s take on their way to invest.  Sure enough there are literally thousands of different means to the same end – or as many different traders as there are different trading methods.  So please sit back, relax and enjoy Strudy’s 9 golden rules of Share Trading!)

1. Stick to the rules.
Believe it or not this is the hardest rule. The trader will keep breaking this one time and time again.  As I have mentioned recently, every time that I have strayed away from my trading plan I have always lost money.

2. Diversify.
Don’t have all your eggs in one basket. Buy from a couple of areas, not just the one sector i.e. mining.

3. Buy shares that suit your trading style.
If you are buying shares for long term, obviously this won’t suit you if you are a short-term trader. And vice versa, shares for short term won’t suit if you are a medium to long term trader.

4. Know your risk tolerance.
A speculative share has a different risk profile to an out-of-favor blue chip. Therefore allocate your capital according to the risk profile of the trade and your own personal risk tolerance.  This is a personal decision that only you can make.

5. Don’t rush in.
All investor’s particularly new ones should take their time and learn about the market before they start trading.  A good way is to “paper trade” first so as so as to learn the basics first.  The market will still be there waiting for you for when you are ready to trade.

6. Don’t get greedy.
Do not expect unrealistic returns.10- 15 % is a good figure to aim for.  Don’t think this is easy, and get over confident and think that you will be a millionaire overnight. It is all too easy to lose money on the stock market.

7. Only invest what you can afford to lose.
If the share is causing you lose sleep or it is worrying you. The reasons could be that you ether own too many of them or it is the wrong type of investment that suits you.  Sell them! Peace of mind is very important. You don’t need the unnecessary stress.

8. Never, ever chase shares.
Never go beyond the limits that you have set.  If you exercise a little patience you will usually be able to buy shares below your limit. The cents saved on your buying and selling will add up by the end of the year.

9. Keep accurate up to date records.
This is most important, particularly at taxation time. For the penalties for not declaring your profits and not paying your capital gains taxes are formidable.

As I have said before the hardest rule is to stick by them.  But believe me it is worth the effort.  I hope these “Golden Rules” make you some gold in the rear future.

Strudy is a successful share trader on the Australian Stock Market Visit his weblog http://www.asxnewbie.com for more free articles and useful information.

March 9, 2010  Tags: , ,   Posted in: Articles On Building Wealth  No Comments

ASX Investor Hour – Oliver Ward Takes The Stage

By Dave McLachlan

This week I had the pleasure of attending an ASX seminar in Brisbane where the key speaker was Oliver Ward – a portfolio manager at RBS Morgans.  As many of you know, I will take any excuse to chat about or get involved in the markets – and at $5 the ASX Investor Hour is a great way to spend a lunch time.  Sometimes it is nice to be reminded that we have many high performing traders and investors right here in Australia.

Apart from being a great speaker, Oliver Ward was able to make a lot of key trading concepts sound simple.  It was refreshing to see the tools he used to make his trading decisions - tools that many regular degree qualified analysts would be hesitant to use (which is probably one of the reasons for his greater success), and yet tools that are also available to private and professional traders alike.

An Effective Way To Look At The Markets

If you missed the opportunity to see him, here is a quick run down on some of the best parts of Oliver’s approach (from memory):

  • Oliver found that a 12 month moving average on the index can help keep you out of bear markets – if it is trading above it: invest, if it is below it: lighten your positions or move to cash.
  • The reason behind this is Oliver believes around 40% of stocks will follow the overall market, and a further 35% (approx) will follow their particular sector.  This leaves only around 25% for the individual stock performance – so if you get the first two right you are streets ahead.
  • If you understand this so far - it makes sense to analyse the relative strength of the different sectors and invest in the strongest ones.  This technique has also been used by great trader William O’Neil, and to do this Oliver gets some of his relative strengh research from www.dorseywright.com – a site available to everyone with a free trial.  Note – this is not to be mistaken for the RSI, a technical chart indicator.
  • Oliver also believes that the overall market will revert back to its average P.E. ratio over time – the market average being 14 to 15.  This means if the overall market P.E. ratio is 7 to 8, it could be a good time to look for opportunities to enter.  Likewise if it is around 20, keep a close eye out for a market reversal.  He made sure to clarify this is nothing to do with the P.E.s of individual stocks, but of the overall market itself.  More research on this can also be found at www.crestmontresearch.com.

Like any great trader, Oliver went into position sizing - preferring to risk 1% per trade and getting his stop to break even / cutting his risk as soon as possible.  Average True Range was mentioned as a way to determine stop losses in the market – because Average True Range increases or decreases with the volatility of the stock or market you are trading, it can give you a more “dynamic” stop loss point.  This has also been used by such traders as the Turtles (for entries), and Bruce Babcock (for stops).

As mentioned before, the ASX investor hours are a great way to spend a lunch time – for $5 you usually get the insights of experienced traders, and I can’t recommend Oliver Ward’s expertise enough.  He was a great speaker, obviously an experienced trader, and highly recommended if you see him around your city again.

Happy trending!

Oliver Ward is a portfolio manager with RBS Morgans in Sydney, taking an Absolute Return approach to money management.  He can be contacted by:

Email: Oliver.Ward@rbsmorgans.com

Or Mobile:  0403 159 406

March 6, 2010  Tags: , , ,   Posted in: Articles On Building Wealth  No Comments

Consolidation or Opportunity? Trend Changes March 2010

By Dave McLachlan

Another great week on the markets, with a few more trend changes coming to light.  While the FTSE is rallying nicely (see the last two Market Watches for a full run-down), the ASX Top 200 and Dow Jones are continuing to tread water.  But does it mean we should be sitting on the sidelines, or is this an opportunity in the making?

The fact is – while the ASX Top 200 has formed a correction lately, it failed to confirm a bear market according to Dow’s Theory.  While the ASX Top 200 is consolidating in a 10% range, individual stocks are continuing to give entry and exit signals.  I guess that’s what keeps it so interesting – there is always something going on in the market, whether it is trading sideways or not.

If we wanted to narrow our search  down further for stocks on the move, we could determine the best places to invest by looking at the relative strength of the different sectors, and investing in the strongest ones.  This is also one of the methods used by William O’Neil, and Oliver Ward from his recent speech at the ASX seminar, but more info on that tomorrow.

For now, here are the trend changes:

Looking at the big ones – in the ASX Top 20 we have WBC and ANZ re-confirming their up trend, and Brambles (BXB) making a Dow Theory entry and heading upwards once again.  As I update them I will include their win percentages and profit to loss ratios over history for your information also.

Since last week, QBE has continued to tank after making a Dow Theory exit signal, and CSL has continued to head upwards after its trend line entry.  For the full list of research, click here.

Happy Trending!

March 6, 2010  Tags: , , ,   Posted in: Market Watch Weekly  No Comments

ASX Market Watch – March 2010 – FTSE, ASX Top200, Dow Jones, CSL and TEL

By Dave McLachlan

Click below for the latest Market Watch Video (if you can’t see the video, click the link above).

UPDATE:

The FTSE continues its bullish run, while the Dow Jones and ASX Top 200 continue to consolidate. This doesn’t mean there aren’t trading opportunities, however – and we look at two of my personal trades TEL (short) and CSL (long). 

As always this is not a recommendation, please do your own due diligence.  A great place to start is the free trading and investment course on this site.  For free trend updates on the big Australian Stocks, check our free research on Australian stock trends.

Happy Trending!

March 6, 2010  Tags: , , , , , , , , ,   Posted in: Market Watch Weekly  No Comments